Abstract

The paper empirically quantifies firm specific 'distribution free' cost efficiency,
economies of scale and economies of scope in the UK building society sector between
1990-1995. Both a flexible Fourier and a translog functional form are employed with
an intermediation representation of depository institution production. Differences in
the performance of these two functional forms are found. A broad distribution of cost
efficiency over the sample period is observed, with a mean efficiency of 76 per cent
estimated using the flexible Fourier form and a mean efficiency of 72.52 per cent
estimated employing the translog form. Distinct results for economies of scale are
produced with the two models.